Aviation share price target

Maintain BUY as Spice will benefit from the benign competitive environment in the near term. The airline is gaining market share post Jet Airways closure (+280bps YoY). However, we are lowering valuation multiples to factor in the grounding of the 737 MAX planes as the resolution of the same is expected to take longer than expected. Aided by lower competition in 1QFY20, Spiceadded 32 planes to its fleet (now at 107) and load factors remain elevated at 93%. Market share of the airline has risen to ~15% post the grounding of Jet. However, the 13 B737 MAX planes are grounded, on which the co is incurring expenses. Valuation multiples will remain constrained till this issue is resolved. Maintain BUY with a revised TP of Rs 170 (7x FY21E EV/EBITDAR, 8x earlier).

After a turbulent April, domestic passenger (pax) traffic rebounded in May growing by 2.8% YoY to 12mn. With peak holiday season and incumbents led by SpiceJet & IndiGo accelerating their aircraft induction plans (in a bid to gain from Jet's downfall), the industry reported a moderate capacity growth of 2.6% (up 8% MoM) while operating at PLFs of 90%. Aided by ~25 aircraft inductions over April-May, SpiceJet reported domestic Pax/ASK growth of 24%/32% YoY while its market share improved ~170bps MoM to a 5-year high of 14.8%. IndiGo inducted ~15 aircrafts over April-May which...

After a turbulent April, domestic passenger (pax) traffic rebounded in May growing by 2.8% YoY to 12mn. With peak holiday season and incumbents led by SpiceJet & IndiGo accelerating their aircraft induction plans (in a bid to gain from Jet's downfall), the industry reported a moderate capacity growth of 2.6% (up 8% MoM) while operating at PLFs of 90%. Aided by ~25 aircraft inductions over April-May, SpiceJet reported domestic Pax/ASK growth of 24%/32% YoY while its market share improved ~170bps MoM to a 5-year high of 14.8%. IndiGo inducted ~15 aircrafts over April-May which...

suspension & grounding of Boeing 737 Max) in holiday season led to capacity constraints. Domestic capacity addition was flat while the industry reported high PLFs of 87%. IndiGo making the most from Jet's loss reported pax/ASK growth of 20%/28% YoY while expanding its market share by ~290bps MoM to 50%. With continued grounding of Boeing 737 Max, SpiceJet reported muted Pax/ASK growth of 1%/5% while its market share declined by ~50bps MoM to 13.1%. However, we expect SpiceJet to gain significantly in immediate future as it plans to induct ~40 ex Jet fleet of Boeing 737.Given the uncertainty...

suspension & grounding of Boeing 737 Max) in holiday season led to capacity constraints. Domestic capacity addition was flat while the industry reported high PLFs of 87%. IndiGo making the most from Jet's loss reported pax/ASK growth of 20%/28% YoY while expanding its market share by ~290bps MoM to 50%. With continued grounding of Boeing 737 Max, SpiceJet reported muted Pax/ASK growth of 1%/5% while its market share declined by ~50bps MoM to 13.1%. However, we expect SpiceJet to gain significantly in immediate future as it plans to induct ~40 ex Jet fleet of Boeing 737.Given the uncertainty...

of 19%/26% YoY as it made the most from Jet's loss, further expanding its market share by ~350bps MoM to 47%. Impacted by grounding of Boeing 737 max, SpiceJet's growth momentum slowed down with Pax/ASK growing by 7%/13% while its market share declined marginally by ~10bps MoM to 13.7%. Given that the favorable yield environment led by capacity constraints is expected to continue in near term, we upgrade our assigned multiples (FY21 EV/EBITDAR) for IndiGo & SpiceJet to 8.8x (previously 8.5x) & 8.3x (previously 8x) respectively. Retain BUY on IndiGo & SpiceJet with revised...

of 19%/26% YoY as it made the most from Jet's loss, further expanding its market share by ~350bps MoM to 47%. Impacted by grounding of Boeing 737 max, SpiceJet's growth momentum slowed down with Pax/ASK growing by 7%/13% while its market share declined marginally by ~10bps MoM to 13.7%. Given that the favorable yield environment led by capacity constraints is expected to continue in near term, we upgrade our assigned multiples (FY21 EV/EBITDAR) for IndiGo & SpiceJet to 8.8x (previously 8.5x) & 8.3x (previously 8x) respectively. Retain BUY on IndiGo & SpiceJet with revised...

We upgrade IndiGo and SpiceJet's FY21 EPS by 13% and 24% respectively on increase in air fares due to capacity constraints which will benefit LCC's like Indigo and SpiceJet. Domestic passenger (pax) traffic growth slowed down for the second consecutive month to 5.6% for Feb'19. Domestic capacity addition (ASK) grew by 10.5% while the industry reported PLFs of 89%. IndiGo, the market leader, reported pax/ASK growth of 15%/21% YoY as it further consolidated its market share to 43.6% (up 90bps MoM). SpiceJet clocked in Pax/ASK growth of 17%/25% and improved its market share by...

We upgrade IndiGo and SpiceJet's FY21 EPS by 13% and 24% respectively on increase in air fares due to capacity constraints which will benefit LCC's like Indigo and SpiceJet. Domestic passenger (pax) traffic growth slowed down for the second consecutive month to 5.6% for Feb'19. Domestic capacity addition (ASK) grew by 10.5% while the industry reported PLFs of 89%. IndiGo, the market leader, reported pax/ASK growth of 15%/21% YoY as it further consolidated its market share to 43.6% (up 90bps MoM). SpiceJet clocked in Pax/ASK growth of 17%/25% and improved its market share by...

We retain our BUY stance with a revised TP of Rs 103, based on a EV/EBITDAR target multiple of 8x on a Dec 20E EBITDAR. SpiceJet printed 3QFY19 revenue of Rs 24.9bn (+19.4% YoY/32.2% QoQ). Spicejets yield improved to Rs 4.07, +1.8% YoY (Indigos at Rs 3.86, +4.5% YoY) while load factors declined 220bps YoY to 91.6%. EBITDAR at Rs 4.6bn was above our estimate of Rs 3.0bn mainly as a result of reversal of expenses of ~Rs 250mn (on account of forex movement) and higher operating income at Rs 1bn. Other operating income was higher on account of a one-time (amount not disclosed) equipment selection incentive.